Salt Lake City absorbed substantial in-migration through 2020–2023 — California exiles, remote workers attracted to lower cost of living, and the continued Silicon Slopes tech expansion in Lehi and Sandy pushing demand higher. The 1.90% cap rate at a $560,000 median price is what's left after that runup. The 0.29% rent-to-price ratio doesn't pass the 1% rule, so this is a growth-and-appreciation thesis market at current pricing.
Employment is anchored by Silicon Slopes (Adobe, eBay, Qualtrics, dozens of mid-stage SaaS firms primarily down the I-15 corridor), the LDS Church corporate structure, the University of Utah and Intermountain Healthcare, and Hill Air Force Base / defense aerospace. Submarkets stratify by Wasatch proximity: the East Bench (Federal Heights, Sugar House, Avenues) commands premium owner-occupant pricing with limited rental inventory. Downtown / Marmalade / 9th & 9th offer walkable urban rentals. Glendale, Rose Park, and parts of West Salt Lake offer deeper-value inventory. The county sprawl (Murray, Midvale, West Valley, Taylorsville) draws family rentals at better cash-flow math. Davis and Utah counties to the north and south have their own dynamics.
Utah property tax at 0.58% is among the lowest in the dataset — a structural cap rate advantage versus equivalent properties in Colorado or California. The state has no formal rent stabilization, eviction process timelines are landlord-friendly relative to coastal peers, and insurance is generally affordable (some wildfire repricing on the Wasatch wildland-urban interface). The structural watch-item is supply: 2022–2023 multifamily permits per capita ran high, and absorption is still working through. Rent growth has flattened in some submarkets. Bake conservative rent growth (1–2%/yr) into pro-formas through 2026 and reassess when absorption catches up.
Market data powered by Zillow Home Value Index (ZHVI) and Zillow Observed Rent Index (ZORI) · Updated Feb 2026
Salt Lake City's 0.3% rent-to-price ratio is well below the 1% rule. At median prices of $560,000, the $1,600/mo rent produces only $889/mo in NOI. Investors here need to target below-median properties or pursue value-add strategies to make the numbers work.
At current rates, a 20% down conventional loan ($112K at 7%) would result in approximately $-2,090/mo cash flow — negative at median prices. Larger down payments, seller financing, or buying 15–25% below median are strategies to turn the numbers positive.
The 29.2x gross rent multiplier and 4.2% vacancy rate position Salt Lake City as a growth-dependent market. With annual appreciation at 2.6%, total returns (cash flow + equity growth) run approximately 4.5% before financing leverage.
All figures below are computed from Salt Lake City's real market medians. Use them as a baseline; override with property-specific numbers in the calculators.
At 0.58% effective rate on the $560,000 median price, the annual tax bill is $3,248 — that's very low (bottom 15% of US markets) (-45% vs the national average of ~1.06%). Verify the actual assessed value before purchase; sale-triggered reassessments can push the bill higher than the seller's current statement.
If Salt Lake City continues appreciating at 2.6%/yr while rents grow at a conservative 3%/yr, cap rate holds roughly steady as price growth outpaces rent. Year-by-year projection at the median:
| Year | Est. Price | Est. Rent/Mo | Cap Rate |
|---|---|---|---|
| Today | $560K | $1,600 | 1.9% |
| Year 1 | $575K | $1,648 | 1.9% |
| Year 2 | $589K | $1,697 | 1.9% |
| Year 3 | $605K | $1,748 | 1.9% |
| Year 4 | $621K | $1,801 | 1.9% |
| Year 5 | $637K | $1,855 | 1.9% |
Same median-priced Salt Lake City property — different capital structures. All-cash maximizes cap rate. Leverage trades cash flow for higher cash-on-cash return when the spread between cap rate and borrowing cost is positive.
| Scenario | Cash Invested | Monthly Cash Flow | Annual CF | Cash-on-Cash |
|---|---|---|---|---|
| All cash | $560K | $889 | $10,666 | 1.9% |
| 20% down conventional @ 7% | $129K | $-2,090 | $-25,085 | -19.5% |
| 25% down DSCR @ 8.5% | $162K | $-2,341 | $-28,092 | -17.3% |
Properties don't always trade at the median. Lower-priced units typically offer higher cap rates but harder operations; higher-priced properties tend to compress cap rates while attracting better tenants. All-cash assumptions below:
| Tier | Price | Rent/Mo | NOI/Yr | Cap Rate | Monthly CF |
|---|---|---|---|---|---|
| Below median (~75% price) | $420K | $1,360 | $8,907 | 2.1% | $742 |
| At median | $560K | $1,600 | $9,834 | 1.8% | $819 |
| Above median (~125% price) | $700K | $1,840 | $10,760 | 1.5% | $897 |
Cap rate is just one piece. Real estate returns come from four sources: cash flow, appreciation, principal paydown, and tax benefits. Assuming 20% down conventional financing at 7% and a 5-year hold at Salt Lake City's historical appreciation rate of 2.6%:
On a $112K down payment, that's a -13.5% total ROI over 5 years (not annualized). Tax benefits from depreciation are additional and depend on your personal tax bracket.
Automated checks against the underlying data — surface only the risks that actually apply to Salt Lake City, not generic boilerplate:
Pre-filled with Salt Lake City medians. Adjust to match a specific property.
Factor in financing to see your actual return on invested capital in Salt Lake City.
Salt Lake City, UT has a population of 204,657 and has been growing at 1.4% annually — above the national average, suggesting steady demand pressure on housing. The median home price of $560,000 paired with median rents of $1,600/mo produces an estimated cap rate of 1.90%.
Property taxes at 0.58% are well below the national average of ~1.1%, providing a meaningful cash flow advantage many investors overlook. The vacancy rate of 4.2% is impressively low, indicating tight rental supply and strong tenant demand — favorable for landlords.
At a price-to-income ratio of 8.2x, homes cost about 8.2 times the local median income of $68,500. This elevated ratio means homeownership is stretched, supporting rental demand but limiting buyer pools. Home values have appreciated at roughly 2.6% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.
Bottom line: At current median prices, Salt Lake City is challenging for pure cash flow investing. Consider BRRRR strategies with below-market purchases, or look at neighboring metros with stronger price-to-rent ratios.